Betting system and method

ABSTRACT

A fixed-odds betting system comprises a user terminal operable to accept parameters input by a user and relating to a fixed-odds bet on an aspect of a financial market; and a central processing machine having a data feed to a source of data concerning a financial market and means operable to calculate the fixed odds for the bet, based on at least some of the parameters input by the user and the data obtained from the data feed.

RELATED APPLICATIONS

[0001] This application claims priority from European Patent ApplicationNo. 00302530.1, filed Mar. 28, 2000, and U.K. Patent Application No.0010270.7, filed Apr. 27, 2000.

FIELD OF THE INVENTION

[0002] This invention relates to a betting system and method for buyingand selling of fixed-odds financial bets, and in particular to a systemby which a user at a remote user terminal may buy and sell fixed-oddsfinancial bets in real-time over the Internet.

BACKGROUND OF THE INVENTION

[0003] Although betting in many diverse forms has been in existence forthousands of years, the concept of a bet on the future performance ofone or more financial market indicators is a relatively recent one. Sucha bet may take one of two forms, as will be described.

[0004] The first form of such a bet (the “spread bet”) is one which, ifwon by the making of a correct prediction, pays out a sum proportionalto the market fluctuation. For instance, a speculator may bet that agiven stock will fall within a set period of time, and, if thisprediction is correct, may receive winnings in direct proportion to theamount by which the stock has fallen in that period of time.

[0005] The other form that such a bet may take is known as the “digitaloption”. Digital bets are of the same form as a traditional sporting betin that the speculator predicts a certain event and receives either afixed sum of winnings (if that event does occur) or no winnings (if theevent does not occur). For instance, a speculator may bet that a certainstock index will rise to a certain level by a certain time. If the namedindex does reach this level, the speculator wins an agreed amount ofmoney irrespective of any amount by which the index has exceeded thepredicted level. It is this type of bet that is known as a “fixed odds”bet.

[0006] However, problems face the individual investor who wishes toplace bets on the financial markets. The wide universe of financialinstruments and derivatives products is typically available only toprofessional investors who have the financial resources and know-how toaccess these products.

[0007] Problems also face the bookmaker who wishes to offer financialbets to the private investor. These include the fact that financialbookmaking is labor-intensive, with skilled staff being requiredconstantly to adapt the odds offered on an immense variety of possiblebets to market conditions that are changing on a minute-by-minute basis.

[0008] The average size of a bet placed by an individual customer will,in general, be very small compared to the average size of a typicalstock market direct investment. The potential profit to the bookmakerfrom such a small investment will therefore be too small for it to beeconomically viable to employ skilled staff to calculate the odds tooffer to individual speculators sufficiently quickly.

[0009] A further problem facing bookmakers is that it is very difficultto accurately price complicated or unusual bets, and bookmakerstypically offer only a few standard bets on a few markets.

[0010] A need exists for a system and method that alleviates some or allof the above problems, and which enables a bookmaker efficiently tooffer a wide range of financial bets to speculators wishing to placerelatively small bets.

SUMMARY OF THE INVENTION

[0011] Accordingly, a first aspect of the present invention provides afixed-odds betting system comprising: a user terminal operable to acceptparameters, input by a user, relating to a fixed-odds bet on an aspectof a financial market; and a central processing machine having a datafeed to a source of data concerning a financial market and meansoperable to calculate the fixed odds for the bet, based on at least someof the parameters input by the user and the data obtained from the datafeed. Advantageously, the user terminal is operable to receive anddisplay the odds calculated by the central processing machine.

[0012] Preferably, the data feed to the source of data concerning thefinancial market comprises at least a data feed to real-time informationconcerning the financial market. Conveniently, the data feed to thesource of data concerning the financial market comprises at least a datafeed to historical data concerning the financial market. Advantageously,the data feed is connected to the source of data concerning thefinancial market over a first data communications network. Preferably,the first data communications network is the Internet or a leased line.The central processing machine may have at least one other data feed toa source of data concerning one or more other financial markets.

[0013] The user terminal and the central processing machine arepreferably connected to one another via a second data communicationsnetwork such as the Internet.

[0014] Conveniently, the system further comprises a payment system fordeducting payment for the bet from the user, the mechanism being linkedto the central processing machine. The payment system for deductingpayment from the user may include an E-cash or credit card paymentsystem.

[0015] The system may further comprise an accounting system linked tothe central processing machine and a management terminal operable toprovide information regarding the operation of the betting system to anadministrator thereof.

[0016] Advantageously, the parameters for calculating the odds includeone or more of the following: the relevant financial market(s); theamount that the user wishes to bet or the amount that the user wishes towin; and one or more barrier or target levels.

[0017] The system may further comprise a storage facility for storinginformation relating to bets. The central processing machine preferablyincludes means to retrieve information stored in the storage facility,and provide information to a user relating to a bet previously placed bythe user.

[0018] Preferably, the central processing machine includes means tocalculate a price at which to offer to purchase the previously placedbet from the user and to display the price calculated by the centralprocessing machine.

[0019] Another aspect of the present invention provides a method ofoperating a fixed-odds betting system, comprising the steps of:providing a user terminal operable to accept parameters relating to afixed-odds bet on an aspect of a financial market from a user; receivingone or more parameters from the user relating to a fixed-odds bet on anaspect of a financial market; providing a central processing machine;providing a data feed to a source of data concerning a financial market;obtaining data concerning a financial market via the data feed; and thecentral processing machine calculating a fixed-odds price for the betbased on at least one of the parameters input by the user and the dataobtained from the data feed.

[0020] The method may further comprise the steps of displaying thecalculated odds to the user and deducting payment from the user forplacing the bet.

[0021] Preferably, the step of receiving one or more parameters from theuser includes the step of receiving information relating to one or moreof the following: the relevant financial market; the amount that theuser wishes to win or the amount that the user wishes to bet; and one ormore barrier or target levels.

[0022] The step of obtaining data concerning the financial market mayinclude the step of obtaining real-time data relating to one or more ofthe following: market prices; option quotes; interest rates and dividendyields.

[0023] The step of obtaining data concerning a financial market mayinclude the steps of obtaining historical data relating to marketprices.

[0024] Preferably, the step of calculating the fixed-odds pricecomprises the step of calculating an estimate of the future volatilityof the financial market.

[0025] Conveniently, the method may further comprise the steps ofchecking the parameters input by the user for logical inconsistenciestherebetween and checking the opening times of the financial market.

[0026] Preferably, the method further comprises the step of providing atleast one other data feed to a source of data concerning one or moreother financial markets.

[0027] Conveniently, the step of receiving parameters from the userpreferably includes the step of receiving parameters relating to anaspect of the one or more other financial markets.

[0028] Advantageously, the step of calculating the fixed-odds price forthe bet preferably includes the step of calculating a correlation matrixcontaining information concerning the financial market and the one ormore other financial markets.

[0029] Preferably, the system further comprises the step of providing astorage facility, accessible by the central processing machine, forstoring information relating to bets.

[0030] Conveniently, the step of calculating odds includes the step ofcalculating a hedging factor based on information concerning previouslyplaced bets obtained from the storage facility. The method may furthercomprise the steps of: (1) calculating, at the central processingmachine, a price at which to offer to buy a previously placed bet fromthe user; and providing the price to the user via the user terminal.

[0031] A further aspect of the present invention provides a computerprogram comprising computer program code means adapted to: receive oneor more parameters from a user relating to a fixed-odds bet on an aspectof a financial market; obtain data concerning a financial market via adata feed; and calculate a fixed-odds price for the bet based on atleast one of the parameters input by the user and the data obtained fromthe data feed.

[0032] Another aspect of the present invention provides a computerprogram as above embodied on a computer readable medium.

[0033] A further aspect of the present invention provides a centralprocessing machine having a data feed to a source of data concerning afinancial market, and being operable to calculate fixed odds, based onparameters input by a user and data obtained from the data feed.

[0034] Conveniently, the data feed to the source of data concerning thefinancial market may comprise a data feed to real-time informationconcerning the financial market.

[0035] Advantageously, the data feed to the source of data concerningthe financial market may comprise a data feed to at least historicaldata concerning the financial market. Preferably, the data feed isconnected to the source of data concerning the financial market over afirst data communications network such as the Internet or a leased line.

[0036] Advantageously, at least one other data feed is preferablyprovided to a source of data concerning one or more other financialmarkets.

[0037] Preferably, the central processing machine further comprises astorage facility for storing information relating to bets.

[0038] The central processing machine preferably has means to calculatea price at which to offer to purchase a previously placed bet from theuser.

[0039] Advantageously, the central processing machine may furthercomprise a management terminal operable to display information regardingthe operation of the betting system to an administrator thereof.

[0040] Additional objects and advantages of this invention will beapparent from the following detailed description of preferredembodiments thereof which proceeds with reference to the accompanyingdrawing.

BRIEF DESCRIPTION OF THE DRAWING

[0041]FIG. 1 shows a schematic layout of the components of a bettingsystem in accordance with a preferred embodiment of the presentinvention.

DETAILED DESCRIPTION OF PREFERRED EMBODIMENTS

[0042] With reference to FIG. 1, a central processing machine 1 of abetting system embodying the present invention comprises a serverrunning a server operating system. A computer program embodying anaspect of the present invention is loaded onto the central processingmachine 1, as will be described in greater detail below.

[0043] The central processing machine 1 is linked via a first datacommunications network 2 to a plurality of user terminals 3. Preferably,the first network 2 is the Internet. The user terminals comprise PC's,or other suitable machines, running an appropriate operating system tointerface with prospective customers, for instance a Windows or UNIXtype operating system.

[0044] The central processing machine 1 is further connected via asecond data communications network 4 to two data feeds, one of which isa data feed 5 to a source of real-time market information, and the otherof which is a data feed 6 to a source of historical market information.Preferably, the second network 4 is the Internet or a leased line.Examples of real-time market quotes data feeds are those provided byfinancial information providers such as Reuters, Bloomberg, Bridge, DBC,etc. The primary requirement for this data link is that it should bereal-time, which is to say that the quotes retrieved via the data linkare up-to-the-second real-time market quotes.

[0045] The betting system further comprises a data storage facility 7,comprising a file server operable to store information concerningplaced, pending and expired bets on one or more disks. The data storagefacility is connected to an archival data storage facility 8, which isoperable to retain information on a plurality of tapes or otherlong-term storage media.

[0046] The betting system includes an E-cash or credit card paymentsystem 9, which is linked to the central processing machine 1 by a thirddata communications network 10. An accounting system 11 is also includedin the betting system, this accounting system being directly linked tothe central processing machine 1.

[0047] A management terminal 12 also comprises part of the bettingsystem. This management terminal 12 is linked to the central processingmachine 1 via a fourth data communications network 13, which ispreferably the Internet.

[0048] In operation, an individual user is able to log on to a userterminal 3 for the purpose of placing a fixed-odds financial bet. Auser-id and password, provided to the individual by the administrator ofthe betting system, may be required to do so. In practice, the userterminal 3 may comprise a dedicated terminal in a public bettingfacility, or may alternatively comprise the user's own PC.

[0049] When the user attempts to log on to the betting system at theuser terminal 3, the user terminal 3 connects to the central processingmachine 1 via the first network 2. If a password is required, thepassword must be accepted by the central processing machine 1 before theuser is allowed to log on to the betting system.

[0050] The user is now able to place a fixed-odds financial bet usingthe betting system. The user terminal 3 presents the user with asuitable interface for doing so, this interface comprising a number ofmenus or the like through which the user may navigate to gleaninformation or select bet parameters. Bet parameters that the user mayselect may include, among others: the financial market(s) upon which thebet is to be based (for instance a foreign exchange rate); the amountthat the user wishes to bet or the amount that the user wishes to win;or one or more barrier or target levels (relating to market performance)which set a threshold for the financial market parameter beingmonitored. Once the bet parameters are decided upon by the user, theseparameters are submitted to the central processing machine 1 via thefirst network 2.

[0051] The first step performed by the central processing machine 1 uponreceipt of the bet parameters from the user terminal 3 is to ascertainwhether or not the bet defined by the bet parameters is withinreasonable reach of current market prices. In order to decide whether ornot this is the case, the central processing machine 1 gathersinformation concerning the current market prices from the data feed 5 tothe source of real-time market information. If the data derivedtherefrom indicates that there is no realistic possibility of the marketprice changing with the rapidity required by the bet, then the centralprocessing machine 1 will reject the bet.

[0052] Next, the bet parameters input by the user are checked by thecentral processing machine 1 for logical inconsistencies, and the bet isrejected if such inconsistencies are found to be present. For instance,if a user has input bet parameters defining a bet that a certainfinancial index will remain between a high value of 110 and a low valueof 120, the central processing machine 1 will determine that the bet islogically inconsistent and reject the bet.

[0053] A further step performed by the central processing machine 1 onreceipt of a set of bet parameters from user terminal 3 is to check theopening times of the relevant financial markets. The central processingmachine 1 has, for this purpose, a link to a source of informationcontaining the opening hours and public holidays of all of the marketsupon which bets are offered. If a user is allowed to bet upon theperformance of a market during a period for which that market is closed,the user gains an unfair advantage and thus such a bet would berejected.

[0054] Once it has been established by the central processing machine 1that the bet parameters input by the user define a valid bet, the nextstep is to determine the real-time raw market values from which tocalculate the price of the bet. In order to do this, the centralprocessing machine 1 accesses the data feed 5 to the source of real-timemarket information. The data derived therefrom may include currentmarket prices, option quotes, interest rate levels, dividend yields (inthe case of stocks or stock indices), or carrying costs (i.e., storage,delivery or insurance costs, in the case of commodities). The centralprocessing machine 1 may also access the data feed 6 to the source ofhistorical market information, and the data gathered therefrom mayinclude historical closing prices for the relevant markets.

[0055] Once a set of valid bet parameters have been received by thecentral processing machine 1 and the relevant information has beengathered from the data feeds 5, 6, the central processing machine 1 usesthe information to calculate the odds that will be offered to the userfor the bet.

[0056] The first step in the process is to calculate the impliedvolatility of the or each market upon which the bet is based. Thevolatility of a market is defined as the amount by which the marketfluctuates during a given period, and is often defined as the annualizedstandard deviation of the natural logarithm of the price returns of thedaily closing values of the market.

[0057] The implied volatility is the market volatility that the listedoptions market implies for the future, market volatility being a majorfactor in the determination of the price of an option. If the price ofthe listed options relating to a given market for a given time period isknown, this figure can be reverse-engineered to calculate the futurevolatility of the market implied by that option price. Varioustechniques exist for this reverse engineering operation, the mostcommonly used of which is an algorithm based on the Black and Scholesoption pricing model, however the skilled person will realize that anyof several alternative algorithms may be used instead.

[0058] A standard option pricing model such as the Black and Scholesmodel assumes that the financial markets follow a log-normaldistribution. This assumption does not, however, accurately reflect themarket panics (like the 1987 stock market crash), which occur with ahigher frequency than would be expected in a purely lognormaldistribution. To adjust for the “fatter tails” of the real distributionof market returns, the concept of “volatility smile” is introduced,whereby options with different strike prices trade at different impliedvolatilities. Options with different expiry dates also trade atdifferent implied volatilities, reflecting different expectations ofmarket volatility over different time periods. Since there will likelynot be any option with exactly the same expiry date and target price asthe bet, interpolation will be used to arrive at the best estimate ofthe volatility for the bet.

[0059] To calculate the volatility to be used to price the bet, optionsprices are gathered from the data feed 5 to the real-time source ofmarket information. The implied volatilities of the options with strikeprices closest to the barrier or target level of the bet, and withexpiry dates closest to the expiry date of the bet, are computed. Theseimplied volatility points are then interpolated to arrive at the impliedvolatility most appropriate for the expiry date and barrier or targetlevel of the bet (if the bet has several barrier or target levels, thelevel that will lead to the highest selling price for the bet may beused). This interpolated implied volatility is used by the centralprocessing machine 1 to calculate the odds for the bet.

[0060] It is also necessary for the central processing machine 1 to takeinto account the growth of the market or markets in question. In orderto derive this value, the interest rate and other components of thecarrying cost for each market (extracted from the data feed 5 to thereal-time source of market information) are required. For stocks orstock indices, the growth of the market is typically approximated asbeing the interest rate minus the annualized dividend yield. In asimilar manner to that described above, the interest rate for anarbitrary time period may be estimated by interpolating between thedeposit rates for earlier and later maturities to arrive at anappropriate value. For foreign exchange rates, the growth rate isdefined as the difference between the deposit rates in each currency,and for other markets such as commodities, the growth rate incorporatesfactors such as storage or delivery costs, and insurance fees.

[0061] A complex bet may involve predictions on the performances ofseveral different markets, and if such a bet is placed then acorrelation matrix for these different markets will need to be computed.Such a correlation matrix is computed by calculating the correlationcoefficients of the relevant markets over a period of historical dataobtained from the data feed 6 to the source of historical marketinformation. Ideally, this time period is in proportion to the length ofthe bet.

[0062] Once all of the necessary information has been gathered orcomputed by the central processing machine 1, the central processingmachine 1 proceeds to calculate the odds for the bet defined by the betparameters. There are various ways in which this may be performed foreach type of bet that might be placed by the user. Common bets thatmight be placed include:

[0063] an “up/down” bet that a given market will be above or below agiven level on a given date;

[0064] an “expiry range” bet that a given market will be between twogiven levels on a given date;

[0065] a “rainbow” bet, which is essentially a multi-market expiry rangebet;

[0066] a “bullseye” bet that a given market will have an exactly givenvalue on a given date;

[0067] a “one-touch” bet that a given market will touch a given barrierlevel at some point before the expiry of the bet;

[0068] a “no-touch” bet that a given market will not touch a givenbarrier level at any point before the expiry of the bet;

[0069] a “range” bet that a given market will touch neither of two givenbarrier levels at any point before the expiry of the bet;

[0070] a “double one-touch” bet that a given market will touch both oftwo given barrier levels at some point before the expiry of the bet;

[0071] a “win”, “place” or “show” bet that a market will be respectivelythe best, or within the top two best, or top three best, performingmarkets (in percentage terms) over a given period; and

[0072] a “quinella”, “tierce” or “exacta” bet defined from theirracetrack equivalents.

[0073] An example of how the price of an expiry range bet might becalculated is as follows:

[0074] The formula for the underlying asset price S is given by:

dS=mSdt+sSdz

[0075] where m is the growth rate, s is the volatility, t is time and zis a variable that follows a Wiener process. The variable z can beunderstood by considering the changes in the value thereof over smallintervals of time. Consider a small interval of time having a durationof dt and define dz as the change in z during dt. There are two basicproperties that dz must have for z to be following a Wiener process:

[0076] dz must be related to dt by the equation:

Δz=ε{square root}{square root over (Δt)}

[0077] where ε is a random drawing from a standardized normaldistribution (i.e., a normal distribution with a mean of zero and astandard deviation of 1.0), and the values of dz, for any two differentshort intervals of time dt, must be independent.

[0078] Solving this equation, we obtain:

S(t)=S exp((m−s ²/2)t+sz(t))

[0079] where S(t) is the asset price at time t and S is the initialasset price.

[0080] Let r be the probability of success of a bet in this model atexpiry time t. The present value of this bet thus becomes:

P=exp(−rt)r

[0081] where P is the present value (or fair price) of the bet, r is theinterest rate, and t is the time to maturity. We denote:

X _(t) =log(S(t)/S)

[0082] and $v = {r - g - \frac{\sigma^{2}}{2}}$

[0083] where S(t) is the asset price at time t, t is the time tomaturity, S is the initial asset price, r is the interest rate, g is thedividend rate and s is the volatility.

[0084] Then, the variable x is defined as$x = \frac{X_{\tau} - {v\quad \tau}}{\sigma \sqrt{\tau}}$

[0085] and is normally distributed with probability density:${f(x)} = {\frac{1}{\sqrt{2\pi}}{\exp \left( {- \frac{x^{2}}{2}} \right)}}$

[0086] Now, we denote:${f(y)} = {\frac{1}{\sqrt{2\pi}}{\exp \left( {- \frac{y^{2}}{2}} \right)}\quad {and}}$N(x) = ∫_(−∞)^(x)f(y)  y

[0087] where N(x) is the cumulative probability of the normaldistribution. Let S be the initial market price, and let$a = {{{\log \left( \frac{U}{S} \right)}\quad {and}\quad b} = {\log \left( \frac{D}{S} \right)}}$

[0088] where U and D are the up and down barriers of the betrespectively. The price of the expiry range bet, defined by U and D, isthen given by:$P = {{e^{{- r}\quad \tau}\left\lbrack {{N\left( \frac{a - {v\quad \tau}}{\sigma \sqrt{(\tau)}} \right)} - {N\left( \frac{b - {v\quad \tau}}{\sigma \sqrt{(\tau)}} \right)}} \right\rbrack}.}$

[0089] Other formulae for different types of bets may readily be derivedby employing the same principles. The type of formula employed is alsonot essential to the working of the system—many different methods ofcalculating odds exist, and any of these may be used in the system ofthe present invention.

[0090] Once the price of the bet defined by the bet parameters input bythe user is determined, a house mark-up is added and the bet is offeredto the user via the user terminal 3. Since the system operates onreal-time values derived from the constantly fluctuating markets, thecustomer is allowed only a short time in which to decide whether or notto purchase the bet at the calculated price. This time period is,preferably, no more than thirty to sixty seconds, and the offer iswithdrawn after this time.

[0091] If the user decides to purchase the bet, he or she will beprompted to input a username and password (if these were not input at anearlier stage). This information is verified by the central processingmachine 1 and, if it is accepted, will check the credit balance of theuser on the accounting system 11. If this reveals that the user hassufficient funds to purchase the bet, the transaction with the user iseffected and the bet is recorded on the data storage facility 7.

[0092] Each user of the system may, on entering his or her validusername and password, view a list of outstanding bets that he or shehas placed on a user terminal 3. In order to provide this list, thecentral processing machine 1 retrieves information regarding the user'spreviously placed bets from the data storage facility 7. The centralprocessing machine 1 must, for each previously placed bet, determinewhether the bet has: already expired or fulfilled the conditions of thebet so that the user has won the bet; already expired or contravened theconditions of the bet so that the user has lost the bet; or has not yetreached the date or conditions of expiry. The central processing machine1 derives this information by comparing the bet parameters with bothreal-time market information and historical market information for therelevant time period obtained via the data feeds 5, 6. The status ofeach previously placed bet is passed to the user terminal 3 for displayto the user. If the user has won any of the bets, the central processingmachine 1 instructs the accounting system 11 to credit the user'saccount accordingly.

[0093] The system may also be provided with a facility to offer to buyan unexpired bet back from the user. The price that is offered for a betis calculated by first determining the value of the bet using similartechniques to those described above, with a house mark-up being includedin the price. As described above, the user is given no more than thirtyto sixty seconds to decide whether or not to accept the price offeredbefore the offer is withdrawn.

[0094] All of the transactions between the central processing machine 1and the users of the system may be monitored by an administrator of thesystem at the management terminal 12. This facility allows theadministrator to ensure that the system is running smoothly and that thealgorithms and/or models employed by the central processing machine 1are producing appropriate results.

[0095] As a further consideration, the administrator of the system maybe concerned about his or her financial exposure and the system mayaccordingly include means to inform the administrator, in real-time, ofthe financial exposure via the management terminal 12. This facilityallows the administrator to “hedge” in the futures and options markets.There are four types of hedging ratio commonly used, namely the delta,theta, gamma and vega hedging ratios. These ratios, along with theappropriate hedging techniques, are well known in the art.

[0096] In an alternative embodiment of the invention the E-cash orcredit card payment system 9 is replaced by a system that operates with“virtual” or “fantasy” money instead of real funds. In such anembodiment, bettors are allocated an initial amount of “fantasy” moneyto purchase bets. Successful bettors have the chance to win prizes orother benefits.

[0097] As a further consideration, whether or not the payment systemcomprises real or “fantasy” money, the administrator of the system maywish to track the bettors who are consistently successful at forecastingthe direction of the financial markets. The administrator knows thatunder the assumption of efficient markets, no person may consistentlyforecast the financial markets, and therefore successful bettors aresimply those that have been successful by chance. However, trackingsuccessful bettors may provide useful information for the administrator,such as useful clues for tracking down problems with this embodiment ofthe invention. The administrator may also sell or provide theinformation comprised of the ongoing bets of the successful bettors, tothird parties who may choose to use or rely upon this information on thebelief that the successful bettors have a special gift rather than beingsimply lucky.

[0098] The betting system embodying the present invention forcalculating the fixed-price odds that may be offered to a prospectivebettor is particularly well-suited to bets placed on the financialmarkets since the calculation of fixed-price odds is sufficientlydifficult, time consuming and computationally intensive to makecalculation thereof by humans inefficient for all but the largest ofbets. The system described herein allows an administrator of the systemto offer reasonable and well-calculated odds in real-time to individualspeculators betting small sums of money on an almost unlimited number ofeventualities, without the need to employ highly-skilled staff to do so.This service has not been available in the past.

[0099] In the present specification “comprises” means “includes orconsists of” and “comprising” means “including or consisting of”.

[0100] It will be obvious to those having skill in the art that manychanges may be made to the details of the above-described embodiment ofthis invention without departing from the underlying principles thereof.The scope of the present invention should, therefore, be determined onlyby the following claims.

1. A fixed-odds betting system comprising: a user terminal operable toaccept parameters input by a user and relating to a fixed-odds bet on anaspect of a financial market; and a central processing machine having adata feed to a source of data concerning a financial market and meansoperable to calculate a fixed odds for an outcome of the financialmarket, the fixed odds based on at least some of the parameters input bythe user and data obtained from the data feed.
 2. A system according toclaim 1 , wherein the user terminal is operable to display, at the userterminal, the fixed odds calculated by the central processing machine.3. A system according to claim 1 , wherein the data feed to the sourceof data concerning the financial market comprises at least a data feedto real-time information concerning the financial market.
 4. A systemaccording to claim 1 , wherein the data feed to the source of dataconcerning the financial market comprises at least a data feed tohistorical data concerning the financial market.
 5. A system accordingto claim 1 , wherein the data feed is connected to the source of dataconcerning the financial market over a first data communicationsnetwork.
 6. A system according to claim 5 , wherein the first datacommunications network is the Internet.
 7. A system according to claim 1, wherein the central processing machine has at least one other datafeed to a source of data concerning one or more other financial markets.8. A system according to claim 1 , wherein the user terminal and thecentral processing machine are connected to one another via a seconddata communications network.
 9. A system according to claim 8 whereinthe second data communications network is the Internet.
 10. A systemaccording to claim 1 , further comprising a payment system for deductinga payment for the fixed-odds bet from the user, the payment system beinglinked to the central processing machine.
 11. A system according toclaim 10 , wherein the payment system for deducting payment from theuser includes an E-cash or credit card payment system.
 12. A systemaccording to claim 1 , further comprising an accounting system linked tothe central processing machine.
 13. A system according to claim 1 ,further comprising a system for varying an amount of virtual moneyassigned to the user in response to the fixed-odds bet and the outcomeof the financial market.
 14. A system according to claim 1 , furthercomprising a management terminal operable to provide informationregarding the operation of the betting system to an administratorthereof.
 15. A system according to claim 1 , wherein the parameters areselected from the group consisting of the following: a relevantfinancial market; an amount that the user wishes to bet; an amount thatthe user wishes to win; and one or more barrier or target levels.
 16. Asystem according to claim 1 , further comprising a storage facility forstoring information relating to the fixed-odds bet.
 17. A systemaccording to claim 16 , wherein the central processing machine includesmeans to retrieve information stored in the storage facility and toprovide information to the user relating to a previously placedfixed-odd bet.
 18. A system according to claim 17 , wherein the centralprocessing machine includes means to calculate a price at which to offerto purchase the previously placed bet from the user for display on theuser terminal.
 19. A method of operating a fixed-odds betting system,comprising the steps of: providing a user terminal operable to acceptparameters relating to a fixed-odds bet on an aspect of a financialmarket from a user; receiving one or more of the parameters from theuser; providing a central processing machine; providing a data feed to asource of data concerning a financial market; obtaining data concerninga financial market via the data feed; and the central processing machinecalculating a fixed-odds price for the bet based on at least one of theparameters input by the user and the data obtained from the data feed.20. A method according to claim 19 , further comprising the step ofdisplaying the calculated odds to the user.
 21. A method according toclaim 19 , further comprising the step of deducting payment from theuser for placing the bet.
 22. A method according to claim 19 , furthercomprising the step of varying an amount of virtual money assigned tothe user in response to the outcome of the bet.
 23. A method accordingto claim 19 , wherein the step of receiving one or more parameters fromthe user includes receiving information selected from the groupconsisting of the following: a relevant financial market; an amount thatthe user wishes to win; an amount that the user wishes to bet; and oneor more barrier or target levels.
 24. A method according to claim 19 ,wherein the step of obtaining data concerning the financial marketincludes obtaining real-time data selected from the group consisting ofthe following: a market price; an option quote; an interest rate; and adividend yield.
 25. A method according to claim 19 , wherein the step ofobtaining data concerning a financial market includes obtaininghistorical data representative of a history of the market prices.
 26. Amethod according to claim 19 , wherein the step of calculating thefixed-odds price comprises calculating an estimate of a futurevolatility of the financial market.
 27. A method according to claim 19 ,further comprising the step of checking the parameters input by the userfor logical inconsistencies therebetween.
 28. A method according toclaim 19 , further comprising the step of checking an opening time ofthe financial market.
 29. A method according to claim 19 , furthercomprising the step of providing at least one other data feed to asource of data concerning one or more other financial markets.
 30. Amethod according to claim 29 , wherein the step of receiving parametersfrom the user includes receiving parameters relating to an aspect of theone or more other financial markets.
 31. A method according to claim 30, wherein the step of calculating the fixed-odds price for the betincludes the step of calculating a correlation matrix containinginformation concerning the financial market and the one or more otherfinancial markets.
 32. A method according to claims 19, furthercomprising the step of providing a storage facility accessible by thecentral processing machine for storing information relating topreviously placed bets.
 33. A method according to claim 32 , wherein thestep of calculating odds includes calculating a hedging factor based oninformation concerning the previously placed bets obtained from thestorage facility.
 34. A method according to claim 32 , furthercomprising the step of the central processing machine calculating aprice at which to offer to buy a previously placed bet from the user.35. A method according to claim 34 , further comprising the step ofproviding the price to the user via the user terminal.
 36. A computerprogram comprising computer program code means adapted to: receive oneor more parameters from a user relating to a fixed-odds bet on an aspectof a financial market; obtain data concerning a financial market via adata feed; and calculate a fixed-odds price for the bet based on atleast one of the parameters input by the user and the data obtained fromthe data feed.
 37. A computer program as claimed in claim 36 embodied ona computer readable medium.
 38. A central processing machine having adata feed to a source of data concerning a financial market, and beingoperable to calculate fixed odds, based on parameters input by a userand data obtained from the data feed.
 39. A central processing machineaccording to claim 38 , wherein the data feed to the source of dataconcerning the financial market comprises a data feed to at leastreal-time information concerning the financial market.
 40. A centralprocessing machine according to claim 38 , wherein the data feed to thesource of data concerning the financial market comprises a data feed toat least historical data concerning the financial market.
 41. A centralprocessing machine according to claim 38 , wherein the data feed isconnected to the source of data concerning the financial market over afirst data communications network.
 42. A central processing machineaccording to claim 38 , wherein the first data communications network isthe Internet.
 43. A central processing machine according to claim 38 ,having at least one other data feed to a source of data concerning oneor more other financial markets.
 44. A central processing machineaccording to claim 38 , further comprising a storage facility forstoring information relating to the bet.
 45. A central processingmachine according to claim 44 , including a means to calculate a priceat which to offer to purchase a previously placed bet from the user. 46.A central processing machine according to claim 38 , further comprisinga management terminal operable to display information regarding theoperation of the central processing machine to an administrator thereof.47. A method of operating a betting system, comprising the steps of:storing predictions made by multiple bettors; comparing the predictionsto outcomes of events to which the predictions relate; and identifyingat least one successful bettor whose predictions are consistentlysimilar to the outcomes.
 48. A method according to claim 47 , furthercomprising the step of offering information comprising subsequentpredictions made by the at least one successful bettor to a third party.49. A method according to claim 47 , wherein the betting system isselected from a group consisting of the fixed-odds betting systems asclaimed in claims 1 to 18 .